SNOWDON: They're the youngest of an otherwise elderly leadership group, but Xi Jinping and Li Keqiang have been nurtured and mentored for years for their roles.

Both have held top positions in some of China's most important provinces and cities. A lot has been made of Xi's credentials as the son of a revered Communist revolutionary and his humble life in the countryside during the cultural revolution. He was relaxed giving his inaugural speech but his comments focussing on the Party itself were anything but relaxed.

XI: Our Party faces severe challenges and there are also many pressing problems within the party that need to be resolved, particularly corruption, being divorced from the people, going through formalities and bureaucratism caused by some party officials. We must make every effort to solve these problems. The whole party must be vigilant against them.

CARR: What is quite arresting in his speech is that corruption has been identified as a major challenge for the party and for the Chinese state.

SNOWDON: Australia's Foreign Minister Bob Carr.

CARR: I think we're very well-positioned to work with China, not only in economic cooperation, but in terms of resolving some of the great challenges of the world. We acknowledge the high level defence collaboration that takes place with China, we're keen to have military exercises and we see that as part of peace-building, about trust, about building confidence. Indeed, you can't survey the world today without acknowledging the importance of China.

SNOWDON: One of the first foreign policy responses that will be closely scrutinised around the region, will be to do with China's conflicting territorial claims, especially with Japan. Xi Jinping won't want to be seen as softer than his predecessor.

Kerry Brown Professor of Chinese Politics at Sydney University, has just spent a month in China.

BROWN: That's a very big point of attrack - if he's seen as too conciliatory. On the other hand, the current status quo can't continue when China is becoming regarded as quite destructive and over-aggressive.

SNOWDON: But the focus for the new leadership at first will be on the home front. There's not much room to move on economic issues as most policy has already been set by the latest five year plan.

MONK: When Hu Jintao, Wen Jiabao came into power, that was the refrain - "We must have reform." Instead, there was a harsher crackdown on any form of dissent. And so, outside of the ceremonialised transition, what you've seen in the Chinese press is that the new leadership must find a way to embrace bold political and social reform, or China is in serious difficulties. That's very easy to miss, with the blandness and cliche of the transition but it's very important for the rest of us to bear in mind.

SNOWDON: Despite the years of rapid economic growth and the commendable success in reducing poverty, the cost and the challenges now confronting China are many. Paul Monk.

MONK: There're enormous problems with social unrest, due to soaring inequality and income. There're rampant problems with the abuse of power by party cadres across the country. There're enormous problems of environmental pollution and they've got the challenge that in the context of all that happening, the very rapid growth they've experienced for the last twenty years has begun to slow. So they have to re-think the institutional basis of their prosperity, and they're not well-placed to do it, because their special interests that have grown up around state-dominated companies, state-owned banks and party interests stand to thwart that sort of change.

SNOWDON: Significantly Xi Jinping will immediately take control of the powerful central military commission, unlike Hu Jintao who waited for two years. Professor Kerry Brown.

BROWN: I think it's giving Xi Jinping incredible potential power. This is a sign of confidence and this a sign that he has got the mandate really to hit the ground running. It also shows that Hu Jintao probably would now just disappear into the background completely.

SNOWDON: The first nation to send congratulations to Xi Jinping appears to have been North Korea, while Japan said it hopes to further develop its "mutually beneficial" relationship with China's new leadership.

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